Cuban Military Takes Over Businesses of Havana Historian’s Office

14ymedio, Luz Escobar (Havana), Mario Penton (Miami), 16 August 2016 —
“Do you see that building? Ten years ago it was full of stinking water,
rats and trash. When people passed through the doorway a balcony could
fall on their head. Today it is housing, thanks to the work of Eusebio,”
Mirna says excitedly.

After expressing her gratitude to the Office of the Historian of the
City of Havana (OHCH) for having provided her a home, this 68-year-old
woman confesses her concern for the future of this institution, which
has passed gradually into the hands of the military.

It is an open secret that the majority of the Historian’s companies have
been transferred to an entity of the Armed Forces. It has not yet been
published in any official decree nor has the national press spread the
news, but the Historian of Havana, Eusebio Leal Spengler, has confirmed
to 14ymedio that assets have been transferred to the Business
Administration Group (GAE), a consortium managed by the Army. “It has
not been transferred to the Armed Forces, but rather to GAE, a
development company with investment capacity and prestige, which the
Historian’s Office maintains the power to advise on the conservation of
the work and also on new projects,” he explained via email.

Leal assures that the institution is calm because “the work of
conservation now extends to the heritage cities of Cuba.” However, the
historian expresses his sorrow at what this means for his efforts to
protect the national patrimony. “It hurts us, that at the time when
perhaps the greatest respect for the circumstances of life is required,
the mediocre who lack any work are taking advantage, the poor in spirit,
to hurt and damage many who have worked over the years to save the
patrimony of a nation, whether in Cuba or anywhere else on earth.”

The Office of the Historian of Havana emerged in the ‘30s, in Republican
Cuba. In 1967, after the death of the first title holder, Emilio Roig de
Leuchsenring, Eusebio Leal took the helm of an entity that gradually
grew not only in size and income, but also autonomy.

Its uniqueness comes from the ‘90s, when the OHCH received by Decree-Law
Number 143, the freedom of economic initiative. The Government, in an
unusual gesture of decentralization, entrusted Leal with creating a
corporate structure that would allow social reinvestment and restoration
of buildings. The institution responsible for the conservation and
rehabilitation of the historic center of Havana, declared a World
Heritage Site by UNESCO, would be answer directly to the Council of
State, and would have a special legal jurisdiction, personality and
permissions to import and export, among other prerogatives.

In addition, it gave the Office the ability to have entities not
subordinate to it and encompassed within in the prioritized are
contribute to the conservation of buildings with payment of 1% of their
income from operations in national currency (Cuban pesos, of CUPs) and
5% from operations in hard currency (Cuban convertible pesos, or CUCs).

Within the broad and complex business fabric that OHCH has woven for
more than two decades are the Habaguanex hotel chain; the San Cristobal
travel agency; the Opus Habana cultural magazine; the Habana Radio
station; the Bologna publishing house; and several websites for
marketing its products. The company also controlled two real estate
agencies, Aurea and Phoenix; more than fifty cafes and twenty
restaurants; museums, concert halls and shops; an import company, a
workshop school and three construction companies (later merged into
one), among other assets.

In its 23 years of work, the Office has created more than 13,000 jobs
directly and thousands indirectly. According to research published by
the University of Havana, of the 500 million dollars generated during
this time, 60% has been earmarked for social works. In addition, the
company has received more than 30 million dollars in funding from
international cooperation.

About 55% of tourists coming to Cuba visit Havana, and 90% of them tour
the Historic Center. Tourism revenues are soaring, therefore, in this
area, reaching 2,185 CUC per resident compared with 245 CUC for the
whole city.

“The best part of the cake is Old Havana, everyone knows that, so they
are taking all of Leal’s businesses,” said a worker in an old-age home
funded by the Historian.

Leal confirmed that the Office retains some financial instruments,
including the 5% tax on any public or private activity in the historical
district and the shops considered heritage, linked to the system of
museums. In addition, other State institutions continue to contribute to
the operation of the entity.

The Historian’s Office was getting fat in the first decade of the
century when it added to his portfolio the Traditional Malecon, in 2003,
and Chinatown in 2005. Following the publication in the independent
press of several corruption scandals related to its administration, some
of the OHCH companies were taken over by other state agencies.

“The process of disengagement has been slow. They have been removing one
company after another to save Leal. The comptroller has uncovered a very
large embezzlement and the only way not to charge the Historian, who
actually had nothing to do with these thefts, is to exempt him of
responsibility for these companies,” said a Cuban economist who prefers
to remain anonymous.

Leal flatly denies these allegations and explains that “wherever someone
is willing to sell his soul to the devil there will be administrative or
corruption scandals.” The historian also says that “it is simply about
consolidating efforts for development that we can not handle within our
own means.”

But there are other theories. Eugenio Yanez, a Cuban academic who
belongs to the study center Cubanálisis, believes there are three
problems the transfer is designed to solve: “First, Raul Castro has a
more pragmatic view, so he may want there to be a specialized management
company that is responsible for business in Havana. Then there is the
issue of the Leal’s deteriorating health, and thirdly there is the
problem of serious corruption in the Office of the Historian companies.
The Comptroller has discovered shady businesses. The solution has been
to the transfer them to the Army, which is trusted by Castro.”

Self-employed individuals in Old Havana say they feel protected by the
OHCH. Some expressed to 14ymedio their misgivings about the transfer of
the Office of the Historian’s business to GAE. “The state always
promotes its own restaurants, hotels and businesses instead of private
businesses, so we don’t know what will happen now,” said Reinaldo, who
operates a fashion business.

Camilo Condis, self-employed, who works with Gilberto Valladares
(Papito), the hairdresser who spoke with President Barack Obama during
his visit to Cuba, says that small and medium sized businesses have
worked in Havana as managers of local development. “Without the
Historian’s Office the work we do would not have been possible,” he said
at a meeting of the Association for the Study of the Cuban Economy (ASCE).

As of August 1, the institution that has saved at least one third of the
historic center of Havana has seen its activities reduced to “museum
management, promoting cultural activities and conservation of the
heritage,” says a source at the Vitrina de Valonia cultural center.

No one knows how the restoration processes in the capital will proceed
from now on, but many fear that the military will not know how to manage
the legacy of the Historian and will seek a more immediate
profitability, without taking residents into account.

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